Part L - Segment reporting

The model for segment reporting is in line with the organisational structure used by the Head Office to analyse Group results and is broken down into the following segments: Trade Receivables, Distressed Retail Loans, Tax Receivables, Governance and Services. The Governance and Services segment manages the Group's financial resources and allocates funding costs to operating segments and subsidiaries through the Group's internal transfer rate system. The internal transfer rate system was updated effective 1 July 2013 to correctly represent the contribution of the different segments to the Group's results, accounting for the changes in the current situation and outlook of financial markets.

Trade receivables

This segment includes the following business areas:

Italian Trade Receivables, dedicated to supporting the trade receivables of SMEs operating in the domestic market;

Foreign Trade Receivables, for companies growing abroad or based abroad and working with Italian customers;

Pharma, supporting the trade receivables of local health services' suppliers.

Distressed Retail Loans

This is the Banca IFIS Group's segment dedicated to non-recourse factoring and managing distressed retail loans. It serves households under the new CrediFamiglia brand.

The sector, formerly known as NPL, was renamed during 2013 as "Distressed Retails Loans" (hereinafter "DRL") so as to avoid confusion with impaired assets, defined as "non-performing loans (NPLs)" in English.

The business is closely associated with recovering impaired loans. Loans in the DRL segment are included among bad and substandard loans: in particular, those loans are initially attributed the same classification as that assigned by the invoice seller, provided the latter is subject to the same law as Banca IFIS; otherwise, if the Bank has not ascertained the debtor's state of insolvency, those loans are classified as substandard.

Tax receivables

It is Banca IFIS Group’s segment specialised in purchasing tax receivables arising from insolvency proceedings; it operates under the Fast Finance brand and offers to buy both accrued and accruing tax receivables on which repayment has already been requested or which shall be requested in the future, and that arose during insolvency proceedings or in prior years. As a complement to its core business, this segment acquires also trade receivables from insolvency proceedings.

Since the Public Administration is the counterparty, tax receivables are classified as performing; trade receivables, on the other hand, may be classified as impaired loans, if required.

Governance and services

Within the scope of its management and coordination activities, the Governance and Services segment exercises strategic, managerial, and technical-operational control over operating segments and subsidiaries.

Furthermore, it provides the operating segments and subsidiaries with the financial resources and services necessary to perform their respective business activities. The Internal Audit, Compliance, Risk Management, Communications, Strategic Planning and Management Control, Administration and General Affairs, Human Resources, Organisation and ICT functions, as well as the structures responsible for raising, allocating (to operating segments and subsidiaries), and managing financial resources, are centralised in the Parent Company. Specifically, this segment includes both the contribution of the securities portfolio to net interest income, and the cost of retail funding exceeding core loans and held in order to guarantee an adequate level of liquidity under economic stress scenarios.

Here below are the results achieved in 2014 by the various business sectors.

STATEMENT OF FINANCIAL POSITION DATA

(in thousands of euro)

TRADE RECEIVABLES

DRLs

TAX RECEIVABLES

GOVERNANCE AND SERVICES

GROUP CONSOLIDATED TOTAL

Available for sale financial assets

Figures at 31.12.2014

-

-

-

243.325

243.325

Figures at 31.12.2013

-

-

-

2.529.179

2.529.179

Change %

-

-

-

(90,4)%

(90,4)%

Held to maturity financial assets

Figures at 31.12.2014

-

-

-

4.827.363

4.827.363

Figures at 31.12.2013

-

-

-

5.818.019

5.818.019

Change %

-

-

-

(17,0)%

(17,0)%

Due from banks

Figures at 31.12.2014

-

-

-

274.858

274.858

Figures at 31.12.2013

-

-

-

415.817

415.817

Change %

-

-

-

(33,9)%

(33,9)%

Loans to customers

Figures at 31.12.2014

2.455.052

135.429

119.473

104.376

2.814.330

Figures at 31.12.2013

1.938.415

127.945

90.282

140.291

2.296.933

Change %

26,7%

5,8%

32,3%

(25,6)%

22,5%

Due to banks

Figures at 31.12.2014

-

-

-

2.258.967

2.258.967

Figures at 31.12.2013

-

-

-

6.665.847

6.665.847

Change %

-

-

-

(66,1)%

(66,1)%

Due to customers

Figures at 31.12.2014

-

-

-

5.483.474

5.483.474

Figures at 31.12.2013

-

-

-

4.178.276

4.178.276

Change %

-

-

-

31,2%

31,2%

INCOME STATEMENT DATA

(in thousands of Euro)

TRADE RECEIVABLES

DRLs

TAX RECEIVABLES

GOVERNANCE AND SERVICES

GROUP CONSOLIDATED TOTAL

Net banking income

Figures at 31.12.2014

155.561

30.038

11.003

84.328

280.930

Figures at 31.12.2013

129.702

24.374

9.287

100.833

264.196

% Change

19,9%

23,2%

18,5%

(16,4)%

6,3%

Net profit from financial activities

Figures at 31.12.2014

122.555

31.479

11.269

84.328

249.631

Figures at 31.12.2013

81.319

27.826

9.690

100.774

219.609

% Change

50,7%

13,1%

16,3%

(16,3)%

13,7%

QUARTERLY INCOME STATEMENT DATA

(in thousands of Euro)

TRADE RECEIVABLES

DRLs

TAX RECEIVABLES

GOVERNANCE AND SERVICES

GROUP CONSOLIDATED TOTAL

Net banking income

4th Q.2014

39.522

10.005

2.871

17.766

70.164

4th Q.2013

39.008

4.982

1.702

24.365

70.057

Change %

1,3%

100,8%

68,7%

(27,1)%

0,2%

Net profit from financial activities

4th Q.2014

36.534

11.202

3.017

17.766

68.519

4th Q.2013

27.150

6.826

1.693

24.365

60.034

Change %

34,6%

64,1%

78,2%

(27,1)%

14,1%

SECTOR KPIs

(in thousands of Euro)

TRADE RECEIVABLES

DRLs

TAX RECEIVABLES

GOVERNANCE AND SERVICES

Turnover (1)

Figures at 31.12.2014

8.312.798

n.a.

n.a.

n.a.

Figures at 31.12.2013

5.701.892

n.a.

n.a.

n.a.

Change %

45,8%

-

-

-

Nominal amount of receivables managed

Figures at 31.12.2014

3.101.058

5.630.151

167.834

n.a.

Figures at 31.12.2013

2.577.820

3.911.852

140.160

n.a.

Change %

20,3%

43,9%

19,7%

-

Net non-performing trade receivables/Loans to customers

Figures at 31.12.2014

1,3%

51,8%

0,0%

n.a.

Figures at 31.12.2013

2,6%

52,0%

0,6%

n.a.

Change %

(1,3)%

(0,2)%

(0,6)%

-

RWA (2)

Figures at 31.12.2014

1.802.978

135.426

37.595

187.560

Figures at 31.12.2013

1.561.355

127.945

33.292

227.883

Change %

15,5%

5,8%

12,9%

(17,7)%

(1) Gross flow of the receivables sold by the customers in a specific period of time. (2) Risk Weighted Assets

For a more detailed analysis of the result of the business sectors, please refer to the Directors’ Report.